TLDR
- Backpack announced the acquisition of FTX EU on January 8, 2025
- FTX bankruptcy estate claims that the sale was unauthorized
- The backpack says the Cyprus regulator approved the purchase in December 2024
- Former FTX/Alameda employees founded Backpack
- The dispute is about authorization to distribute funds to FTX EU creditors
FTX bankruptcy estate have questioned the validity of crypto exchange Backpacks announced the acquisition of FTX EU, creating uncertainty about the future of the collapsed crypto exchange’s European branch.
On January 8, 2025, Backpack, a cryptocurrency exchange and wallet provider, announced its acquisition of FTX EU. The company, founded by former employees of FTX and Alameda Research, said Cyprus’ regulator had approved the purchase in December 2024.
Hours after the announcement, the bankruptcy estate of FTX issued a strong rebuttal, stating that the sale was unauthorized and occurred without their knowledge or involvement. The estate emphasized that Backpack has no authority to distribute funds to FTX customers or other creditors.
The dispute highlights the complex nature of FTX’s bankruptcy proceedings, which began in November 2022 following the stock exchange’s spectacular collapse. The bankruptcy estate maintains strict control over all FTX assets and operations through oversight by the US Bankruptcy Court.
Backpack’s announcement included plans to operate a regulated crypto derivatives service with licenses acquired through the purchase. The company also outlined intentions to compensate FTX’s EU creditors, although specific details of the compensation structure were not disclosed.
Dispute
The role of the Cyprus Securities and Exchange Commission in the situation remains unclear. While Backpack claims to have received regulatory approval, the FTX bankruptcy trustee’s statement suggests that such approval would not override the US Bankruptcy Court’s jurisdiction.
The controversy raises questions about the jurisdiction and authority over FTX’s international subsidiaries. FTX EU operated under Cypriot rules prior to the collapse of the stock exchange and served European clients through its licensed entity.
The timing of the dispute comes as the broader FTX bankruptcy proceeding continues in Delaware. The estate has worked to recover assets and develop plans for creditor compensation through court-approved processes.
Launched in 2024, Backpack has positioned itself as a new player in the cryptocurrency market. The company’s management includes people who previously worked at FTX and Alameda Research before the stock market collapse.
The disputed acquisition notice created confusion among former FTX EU customers, who have been waiting for clarity on the status of their funds since November 2022. The FTX bankruptcy trustee maintains that all claims must be processed through official channels.
The estate emphasized that any unauthorized attempt to distribute assets could disrupt the court-supervised process designed to ensure fair treatment of all creditors of FTX’s global operations.
Financial details of the purported acquisition were not disclosed in Backpack’s announcement. The company has not publicly responded to the bankruptcy estate’s statement as of January 9, 2025.
The FTX bankruptcy trustee continues to work with legal teams across multiple jurisdictions to resolve complex issues related to the exchange’s international operations and assets.
Current estimates suggest that FTX owes more than $8 billion to creditors worldwide, with European customers representing a portion of those claims.
The dispute over the sale of FTX EU is still active and both parties maintain their positions regarding the legitimacy of the transaction as of January 9, 2025.
